How Are Insurance Rates Calculated

The amount you pay for your car insurance policy is a reflection of how likely an insurer thinks you are to make a claim, and how expensive that claim is likely to be. It’s all about the risks and this is why some drivers are classified as “high-risk”. Let’s analyze the main factors that influence insurance costs and how car insurance rates are calculated. We also recommend you to get an auto insurance quote online for free from our website.  So, these are the main factors:

  1. # auto-insurance-discountsYounger drivers, who have less experience behind the wheel than older drivers, are statistically more likely to be involved in an accident. This means that drivers aged between 17 and 25 generally pay the highest premiums. Unfortunately that is a factor you can’t change. It’s widely believed that drivers who hit 25 years of age instantly get lower insurance prices, but this is not always the case.
  2. Your job. Certain jobs imply that you spend more time on the road, carry important equipment with you, or work in high-risk areas. Due to the statistical nature of insurance pricing, occupations like those can often have a noticeable higher cost. Also, make sure to correctly add your title.
  3. The car you want to insure. The type of car you drive will have a huge weight on how much you pay for your insurance. The more expensive your car, the more it’d cost to replace if stolen or totaled in an accident. High-priced cars may also cost more to repair, particularly if they’re rare and have expensive parts. Also, the larger your car’s engine, the higher the insurance costs.
  4. The place you live. If you live in a metropolitan area where the risk of accidents is generally greater, you’ll pay more. The same applies if you live somewhere with high levels of vehicle crime (like car theft or car vandalism).

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